Auctioning with Aspirations: Keep Them Low (Enough)

Nicholas Shunda ()

MPRA Paper from University Library of Munich, Germany

Abstract: In an auction with a buy price, a seller offers bidders the opportunity to forgo competing in an auction by transacting immediately at a pre-specified fixed price. If a seller has aspirations in the form of a reference price that depends upon the auction's reserve price and buy price, she does best to keep her aspirations sufficiently low by designing a no-reserve auction with a buy price low enough that some bidder types would exercise it with positive probability in equilibrium. The seller is indifferent between the auction component of her mechanism being a first- or second-price auction.

Keywords: Auction; Aspiration; Buy price; Internet; Reference-dependence (search for similar items in EconPapers)
JEL-codes: C72 D44 L86 (search for similar items in EconPapers)
Date: 2009-07-13
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/16242/1/MPRA_paper_16242.pdf original version (application/pdf)

Related works:
Working Paper: Auctioning with Aspirations: Keep Them Low (Enough) (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:16242

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().